A word of warning to advertisers who are lining up in the upfront market to buy time on TV networks: Interrupting TV shows is “not something most people will tolerate,” says TiVo CEO Tom Rogers. In the 40% of all households that have a DVR, “the amount of commercial avoidance is huge.” That’s good news for TiVo, which helps people to zap ads — and also wants to help advertisers find “new forms of inventory,” as Rogers put it, to sell stuff to people who’d rather be left alone.
But Rogers punted on the sharpest questions about TiVo’s future that were put to him today at the Sanford C. Bernstein Strategic Decisions Conference. Rogers sidestepped an opportunity to say when TiVo might see a meaningful increase in its subscribers — at about 2 million, it’s less than half of what it was in early 2007. And although he said that he will “think seriously about a (stock) buyback,” he wouldn’t say what he plans to do with TiVo’s cash following the recent $600 million settlement of TiVo’s patent infringement suit against Dish Network. Rogers repeated his hope that cable and satellite companies will offer TiVo DVRs in place of traditional set-top boxes. The growth of Netflix shows that “there are a massive number of cable subscribers looking for additional choice” from a service like TiVo that integrates broadband video with traditional TV channels, Rogers says. “Cable used to stand for choice,” he added. “Now there’s more choice outside” on the Internet. But he doesn’t expect big technology companies to swoop in to become important competitors. Pay TV providers use different encryption and transmission technologies and “I don’t see the Googles and Apples of the world going operator-by-operator” to work out the kinks. Rogers also says that cable operators should continue to deploy set-top DVRs instead of remote storage technologies like the one Cablevision is starting to use: It stores TV shows on a central server so subscribers can record, watch, and fast-forward through shows using an ordinary cable box without a hard drive. That process “might be slower than what some might be suggesting,” Rogers says. And that, he added, would frustrate consumers who like to skip past commercials.
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